Over major opposition from the financial industry and nearly all Republican committee members, the House Financial Services Committee today passed HR 3126, which would create the new federal Consumer Financial Protection Agency (CFPA) to protect consumers from abusive and deceptive financial products and practices. Advocates are hopeful that the bill will be strengthened in the Senate where Woodstock and others are pushing for agency oversight of the Community Reinvestment Act, which has been severely weakened under the current regulatory structure.
During the deliberations, Congresswoman Melissa Bean (D-8), a moderate and vice chair of the New Democrat Coalition, had considered introducing a blanket preemption of all state consumer laws and enforcement for national banks, but backed down under pressure from constituents, fellow Democrats, and Chairman Barney Frank.
However, several amendments designed to weaken the bill were adopted by the committee, whose members have received considerable campaign contributions. During mark-up, a provision was added to allow the Office of the Comptroller of the Currency to preempt state laws on a case-by-case basis under certain conditions. Another harmful amendment exempted auto dealers from CFPA oversight.
Woodstock Institute appreciates the efforts of constituents who weighed in on this process and will continue to monitor the progress of this legislation ensure that consumers received the strongest possible advocate in this new agency.